In most cases, you need to follow these steps to get a VA home loan.
Eligibility Requirements for VA Home Loans
Find a real estate professional to work with. Perhaps a friend has someone to recommend. Or you could look under “Real Estate” in your yellow pages or on the web.
Find a Lender
Locate a lending institution that participates in the VA program. You may want to get “pre-qualified” at this point – that is, find out how big a loan you can afford. Lenders set their own interest rates, discount points, and closing points, so you may want to shop around.
Get a Certificate of Eligibility
The Certificate of Eligibility (COE) verifies to the lender that you meet the eligibility requirements for a VA loan. Learn more about the evidence you submit and how to apply for a COE on our Eligibility page.
Find a Home and Sign a Purchase Agreement
Work with a real estate professional and negotiate a purchase agreement. Make sure the purchase and sales agreement contains a “VA Option Clause.”
Here’s a sample of a “VA Option Clause”:
“It is expressly agreed that, notwithstanding any other provisions of this contract, the purchaser shall not incur any penalty by forfeiture of earnest money or otherwise be obligated to complete the purchase of the property described herein, if the contract purchase price or cost exceeds the reasonable value of the property established by the Department of Veterans Affairs. The purchaser shall, however, have the privilege and option of proceeding with the consummation of this contract without regard to the amount of the reasonable value established by the Department of Veterans Affairs.”
You may also want the purchase agreement to allow you to “escape” from the contract without penalty if you can’t get a VA loan.
Apply for your VA Loan
Work with the lender to complete a loan application and gather the needed documents, such as pay stubs and bank statements.
The lender orders a VA appraisal and begins to “process” all the credit and income information.
(Note: VA’s appraisal is not a home inspection or a guaranty of value. It’s just an estimate of the market value on the date of the inspection. Although the appraiser does look for obviously needed repairs, VA doesn’t guarantee the condition of the house. The appraiser, who is licensed, is not a VA employee. The lender can’t request a specific appraiser; assignments are made on a rotating basis.)
The lending institution reviews the appraisal and all the documentation of credit, income, and assets. The lender then decides whether the loan should be granted.
The lender chooses a title company, an attorney, or one of their own representatives to conduct the closing. This person will coordinate the date/time and the property is transferred. If you have any questions during the process that the lender can’t answer to your satisfaction, please contact VA at yourRegional Loan Center.